Skip to main content

Wake up to GST dawn : After 17 years of making, PM, Prez launch tax reform

The biggest tax reform of independent India, the goods and services tax (GST), was finally rolled out at the midnight hour on Friday, with President Pranab Mukherjee and Prime Minister Narendra Modi pressing a button to mark the occasion in the historic central hall of Parliament.
Calling the GST “a good and simple tax”, Modi said the country was moving towards a modern taxation system, much simpler and more transparent than the existing one. “From Gandhinagar to Itanagar, from Leh to Lakshadweep, the dream of one nation, one tax will come true,” he added.
The GST replaces 17 central and state taxes, including services tax, value-added tax, octroi, duties and other charges, except Customs levy, across the country except in Jammu and Kashmir. The tax will create a common market in the $2-trillion economy with 1.3 billion people. It is expected to curb “tax terrorism and inspector raj”. 
At the hour-long event, former prime minister H D Deve Gowda, industrialist Ratan Tata, and Reserve Bank of India Governor Urjit Patel were present. Star invitees such as the brand ambassador for the indirect tax, Amitabh Bachchan, and Lata Mangeshkar did not make it. 
Former PM Manmohan Singh as well as former finance minister P Chidambaram, who had proposed the GST in the 2006-07 Budget, and other Opposition leaders were conspicuous by their absence. They had decided not to attend as they felt the GST is not ready to be rolled out. However, former West Bengal finance minister Asim Das Gupta, also the former chairman of the empowered committee of state finance ministers, was present even as the Communist Party of India (Marxist), of which he is a member, boycotted the event.
Traders, who have been protesting various provisions of the GST laws, also escalated their agitation on Friday, observing a daylong Bharat Bandh.The PM, however,  claimed the GST would benefit businesses.
“Businesses will no longer be harassed by tax officers, as all grey areas have been removed,” Modi said, adding black money creation and corruption will be curbed. The PM also said the GST would yield more resources for the poor, with an increased tax base.
Hours before the new indirect tax regime was rolled out, the GST Council gave relief to agitating farmers in the kharif sowing season by lowering the rate on fertilisers to 5 per cent from 12 per cent and on tractors parts to 18 per cent from 28 per cent.
 “There was uncertainty around the proposed GST rate for fertilisers. The GST Council has given approval to additional laws needed for its implementation,” said Finance Minister Arun Jaitley.On the initial difficulties businesses might face, Modi said they would have to swiftly align themselves with the new tax regime.
President Mukherjee, who was finance minister when the first Constitution amendment Bill on the GST was moved in the Lok Sabha, said the GST was a disruptive change. However positive it might be, there was bound to be some teething troubles and difficulties. He called upon the GST Council to continue improving the design of the tax.
He also said the GST would make India’s exports more competitive and provide a level playing field to domestic industry to compete with imports.Jaitley said the GST would rein in inflation, and make it difficult to evade taxes, besides enhancing the gross domestic product growth.
The Parliament building and the GST Bhavans across the country were lit up on the eve of the roll-out. Restaurants billed consumers differently before and after midnight.
All goods and services have been slotted under six tax slabs: 0 per cent, 3 per cent (for bullion), 5 per cent, 12 per cent, 18 per cent, and 28 per cent. There is also a cess, over and above the highest rate, for demerit goods.
Business Standard New Delhi, 01st july 2017


Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Coffee-Toffee, the GST Debate Continues

Hundreds of crores of rupees in the form of taxes ride on the exact categorisation of products Is Parachute hair oil or edible oil? Is KitKat a chocolate or a biscuit? Is a Vicks tablet medicament or confectionery? For the taxpayer and the tax collector, this is much more than an exercise in semantics -hundreds of crores of rupees ride on the exact categorisation.
As the government moves closer to rolling out the goods and services tax (GST) on July 1, many such distinctions are being debated so that no ambiguity remains. Not just that, the government is revisiting old tax cases that were lost over product categorisation, according to people with knowledge of the matter, presumably with a view to making sure that revenue collections can be maximised. “In the past, several tax officers had challenged some of the product categorisations, including those in the retail segment, but lost out in court or at appellate level,“ said one of the persons. “Now we have a chance to go ahead with speci…

Deposit gush:-CA Institute Bats for Special Audit